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First Business

News/Business. Angie Miles. (2012) New. (CC) (Stereo)




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Us 4, U.s. 4, Priceline 2, Andrew Keene 2, Nomophobia 2, Canada 2, Samsung 2, Peregrine 2, Citi 2, Steve 2, Comcast 2, Wasendorf 1, Milwaukee 1, India 1, Brian Kasal 1, Angie 1, Angela 1, Whovever 1, Romney 1, Russell 1,
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  FOX    First Business    News/Business. Angie Miles.  
    (2012) New. (CC) (Stereo)  

    October 29, 2012
    4:00 - 4:30am PDT  

because our nation expects more. if you expect more, maybe you were born ready. find out at financial crisis is finally coming to an end. in today's cover story, how one little number is playing a big role in the home stretch of the presidential race. plus, smartphone addiction is now a textbook definition. how to kick the habit. and, how the gift of giving can affect your portfolio for the better. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, october 29th. i'm angela miles. in today's first look: contigency plans at trading
firms in new york are in place ahead of the so-called super storm. reports say eurozone finance ministers will meet october 31st to decide whether to release $35 billion of aid to greece. 500 chefs are asking the u.s. government to prevent unapproved fish from making it onto american plates. and the national average on a gallon of unleaded gasoline dipped 14 cents from last week. kevin craney of rjo futures joins us on this monday morning. good morning to you kevin. > > good morning. > > better-than-expected news about the economy came out in that gdp number on friday. will we see follow-through in the market today? > > i think you will see a little bit of follow-through. that number is really a feel- good number. 2% above expectations. but really i do think it's important to dig down into the details of that number - fixed investment and exports actually contracting. so, the question is how long can the consumer continue to spend and the government continue to
spend and prop up the economy? so, i think that's something you have to watch. but yes, i do think we'll see a little follow-through today. > > how much of an effect do you think this storm that seems to be brewing out there, wicked whether this week, will affect the market? will it be rattled? > > the models say that this storm could be a really big storm, going back to predate some of the other historic ones. i think you could see a little lower volume if it really does have an impact on the financial markets, which could make for a little bit more volatility. but really i think you have to look at the commodity side. oil refineries, if they shut down, you may see a pop in gasoline. but, it will be interesting to watch. > > what will be on the minds of traders overall this week, especially with the jobs number coming out on friday? > > i think that is going to be the big key report coming out on friday. this is the last jobs report before the election. it's really going to set the tone for a lot of people. i think we're really going to have to see a big number to the upside. i don't anticipate seeing that. i anticipate
continuing to see the same kind of numbers that we have seen, just showing mediocre growth. i think it's going to be important to watch the fomc that we have this week too to see what their read on the economy is and what it may be going forward as well. > > thank you very much. kevin craney, rjo futures. > > thank you. gross domestic product, often simply "gdp," is a broad measure of economic activity that can be a gross domestic problem for incumbent presidents. in the third quarter, gdp nudged up 2% - just about or slightly better than some predicted, and with enough positive as well as negative aspects for both presidential candidates to claim. the latest gdp numbers - up 2% in the third quarter - brought on an "extra" debate round for the presidential candidates. "it's great" "not so great" gdp - gross domestic product, the market value of goods and services we produce - often tells whether we are getting wealthier or poorer as a nation. on the plus side, durable goods sales were up, especially electronics. "we're still seeing the iphone, ipad, iwant is affecting consumers, so that continues to defy expectations." plenty of things without an "i" in their name sold, too. cars and recreational goods accounted for a quarter of gdp
growth. more people bought houses. and offsetting losses from the drought, there was a nearly equal jump in defense spending that some say anticipates cutbacks next year but for now helps q3 gdp. "if we go into sequestering, you're going to see defense budget items slashed, and so they're doing some pre-emptive buying to get it now." but on the negative side, business investment has stalled. "i think it's having a huge impact and it's holding up hiring, so the uncertainty over who wins, the tax policy, all that, is going to delay them." mesirow financial's chief economist diane swonk says "the decline in business investment represents a particular blow as it not only reflects weakness abroad, but also the uncertainty about our own policies. the fiscal cliff needs to be dealt with by whovever wins in a credible and bipartisan way, and asap."
with just about one week to go before the election, the candidates will be in wisconsin this week. today, republican mitt romney's campaign has an event in milwaukee. tomorrow, president obama will be in green bay. the volitility index, better known as the vix, may be signaling better days ahead. according to reports, a strategist at jpm morgan believes if the vix remains near current levels this week, it will mark a transition from crisis to normal time. his theory is if the vix stays around 16, the 52-week moving average will fall below the july 2011 level to its lowest point since february 2008. we asked a couple of options traders to weigh in, starting with scott bauer of trading advantage.
"yes, i do believe that if we get through the crisis of these horrendous earnings we've been seeing over the past couple weeks and we stablize and stay in this range, i do think we will be back to what we call that normal trading range." "i think it's too early to tell right now from the vix if the environment out there is going to be more normalized for the next several months." dan deming of stutland equities also says vix futures continue to indicate there is still uncertainty, and the upcoming election could play a role in wild swings in the market. 1,100 new employees start work at chrysler today. that's in addition to the 7,000 new workers since chrysler exited chapter 11 bankruptcy in 2009. the car company also plans to add 900 to 1,000 workers at a truck plant by march. most of the workers will be on a new, four-day, 10-hour schedule that includes fridays, saturdays,
mondays and tuesdays. the new schedule reduces the cost of running the plant and cuts down on overtime pay. u.s. car dealers are ticked off with tesla. the electric car company started selling its model "s" luxury hatchback through its own stores rather than traditional dealerships. it eliminates, for instance, the $1300 cut car dealers get from each of the 12.8 million cars sold in the u.s. last year. some dealers have already filed lawsuits. they're concerned that other, larger automakers may follow tesla's lead. cme group plans to start paying back former clients of peregrine financial next month. about 200 farmers and ranchers will receive $2 million. it's the first payout from the cme's fund that was set up after mf global collapsed in october 2012. so far, peregrine's bankruptcy trustee has released about $123 million from its estate back to former customers, or about 30 to 40 percent of what customers were supposed to have in their accounts. founder
and ceo russell wasendorf, sr., pled guilty to stealing more than $100 million from clients. more clues about what was happening behind the scenes of facebook's ipo are emerging. the state of massachusettes fined citigroup $2 million, allegedly because a citi analyst broke rules by sending confidential information about the social media company to a tech news site weeks before the ipo. the analyst was fired in september. citi was an underwiter of the stock and has agreed to pay the fine. other firms have also been subpeonaed. facebook shares debuted in may at $38 and closed friday at $21.94. a quick check on corporate earnings now. goodyear tire stock took a hit of about 10% friday due to lower european demand. however, demand was up at comcast. the summer olympics provided a boost to the company, with income nearly doubling last quarter. comcast's stock jumped to $37 following the news. and, after beating wall street's estimates, tupperware and sharpie marker maker newell-rubbermaid says it
will cut 10% of its staff over the next 2-and-a-half years. its part of the company's larger global restrucutring plan. samsung turned in record profits for the third quarter by remaining the number one smartphone seller. samsung profits nearly doubled to $5.97 billion. it also sold 55.5 million smartphones, compared to apple's 26.9 million sales of iphones. apple will get a boost today when the iphone 5 finally goes on sale in india following several delays. peanut butter prices are smoother for consumers. peanut farmers are expecting a bumper crop this year. peanuts were one of the few crops to avoid being scorched by this summer's drought. a 2011 drought in the southeast damaged crops and peanut prices spiked. now the abundant supply may help bring prices back down by 30%. mcdonald's is breaking new grounds in canada. it plans to sell bagged, ground and whole- bean coffee in november at the burger chain in canada. it's
part of a plan to compete with dunkin' donuts. there are no plans under the golden arches to sell ground coffee in the u.s. sports advertising is getting into the game - literally. players may soon wear advertisements on their jerseys under a plan being tossed around by the nba. unlike the large ads seen on wnba and european soccer jerseys, nba players would sport smaller ads on their jerseys. the nba expects the move will generate $100 million in revenue. ipos this week include luxury home furnishings, retailer restoration hardware, and energy company delek logistics partners. last week's ipo from dean foods spinoff white wave foods fell below its opening price of $17, closing at $16.75 - down from a high of just over $19. the organic dairy company raised $391 million in the offering. the bp oil spill trial will be delayed by the superbowl and mardi gras. the trial was set to begin january 14th, but soon
thousands of football fans and mardi gras revelers would descend into the big easy for the big events and that's when legal teams would likely be kicked out of their lodgings so hotels could honor previously- made reservations. the super bowl is february 3rd. the last day of mardi gras is february 12th. so as to accommodate everyone, a new orleans judge set the trial to begin february 25th. still to come, charitable investments can work in your favor. how to ensure your good intentions come back around to your portfolio. that's later. but first, it's being called 'smartphone addiction.' we'll check on the symptoms next, with bill moller.
oh, sorry. i was just checking my smartphone. what is it about these things you can't seem to ever put 'em down? you know, i was reading a story about this in the chicago tribune. it was written by columnist rex huppke. here's how he starts his piece, he says, "like most well-adjusted americans, i check my smartphone every 5 to 10 seconds." these things really are addicting because they can do almost anything. wow, you're here. did my smartphone do that? > > i don't think so. > > you wrote about this, and there is a term for people who can't seem to take their eyes of these blasted, stupid little screens. > > that's right, it's "nomophobia," where you're anxious if you're anywhere out of arms' reach of your phone. > > and you're so afflicted, as, i guess, am i. > > yes, i think i am,
actually. it's become like a manic, all the time, if i get too far away from it i start to sweat a little bit. > > now what is it? is it something that's sort of clinically diagnosed, nomophobia? > > not yet, although they have started some support groups in california for people who deal with this. [laughs > > but it is something that is affecting, obviously, a lot of people, at least some of the effects of it. people are starting to just get really, really touchy and nervous if they can't have their phones with them. > > now there are some jobs where you absolutely need your phone for communication and other purposes. the idea wouldn't be to ban them then for people who have anything like this condition. > > right. definitely. any time you ban something, you're asking for trouble, because people are going to do it anyway. it's like you want to tell them to not do any shopping online right around the holidays. it's not
going to happen. so, you need to have sort of a policy in place where people can understand when they can use their phones and when they can't, i think. > > could that be managed, actually? > > i think it can, because i think people are smart enough, and as long as you're reasonable, and you say, "okay, you can check your phone at certain times, or you can check your phone a certain amount, as long as it's not impacting your work." because the real thing is that if somebody is just on their phone constantly doing non-work-related stuff, it's going to show up in their production, in whatever it is they're doing. and i think management will be able see that very quickly. i would always much rather see people address a problem when they know it's actually a problem as opposed to just trying to cut everybody off. > > you talk to some experts about this, and it's becoming a clear and growing problem. i have to believe that more and more bosses are talking about this, trying to figure out how to make it all work. > > absolutely, and one thing people are doing is they're bringing their own devices to work. so the company may say, "here's your blackberry," and somebody says, "well no, i have an iphone, and i want to use that." so companies are having to find ways both pragmatically and legally, even, to allow people to do work from whatever device they want, whether it's an ipad or what have you. so they're having to make sure that
they're agreeing to what you can and can't do on this device and the security and all those kinds of things. > > rex, i see that you're starting to perspire. here's your phone back. > > thank you very much. i appreciate that, thanks. still ahead, how to turn your stock market gains into a write- off!
it's the gift that keeps on giving. you make money on the stock market, then use that money to make a contribution to your favorite charity. brian kasal of morgan stanley smith barney is on set with us this morning to talk about philanthropy. good to have you on the show. > > thanks angie, good to be here. > > let's start by talking about people who have made money in the stock market. right? it's been a great year.
> > it's been a very good year. so whenever there's a year when folks have a lot of gains, then this subject becomes more relevant. so you can make donations of stock to charities. if it's small donations, $100 or so, people will write a check. but, when it gets into the thousands, one way to do it is to give stock, appreciated stock. and you get a full deduction if the gain is more than one year. > > so you avoid those capital gains. > > you avoid the capital gains. right. > > and what about if somebody wants to give to a family member, for instance? > > now that is a different story. this year, there is a unique situation that ends at the end of december. in the 2010 tax bill, the government raised the normal estate exclusion limit from what had been for many, many years only
$1 million. so this is how it works: you can give $13,000 - you and your spouse, so a total of $26,000 - to any family member. but anything beyond that counts against your lifetime estate exclusion of $1 million. in the 2010 tax bill, they raised that to $5.1 million, per person, and $10.2 million for a couple, which is a substantial difference. so you can now move money out of your taxable estate up until december 31st, however. so you need to get moving on that issue right away. > > are you seeing a lot of that activity with your own clients or other clients around the nation? > > we are. as folks are finding ways to move money to their family members so they avoid estate taxes later in life. > > good to have you on the show this morning. that's brian kasal of morgan stanley smith barney. > > thanks. great to be here. up next, why traders are watching expedia stock for clues about how priceline will move off earnings news.
andrew keene, president of, joins us now for a closer look at a couple of stocks that have earnings this week and next
week. we'll start with visa. > > visa has earnings this week. it has had a recent pullback from this $142.50 level. currently trading at $138.50. we have seen the market dip right around this $1,400 level. obviously the stocks are going to move with the stock market, so visa moves with it. i always talk about the banks, how i'm not a big fan of the banks. but if i had to own a bank, i would do it in the form of a credit card company. so that's looking at american express, visa, and mastercard. so on this pullback i think it's a good opportunity to get into a position. all of the moving averages are way, way lower around this $100 level. if we look at the chart, it looks very, very strong since june. it has been a straight bull channel going higher. i think it's going to test up to $142.50. i think it could even hit $145. > > and what about priceline? earnings are not for a week or so. they ing out the monday before the election. but i want to note this stock because it definitely got a boost on friday off of expedia's better-than-expected numbers. what do you think about this stock? > > priceline is a little pricey compared to expedia. on earnings it has a p/e of about 24. expedia, even with that
huge pop, has a p/e of around 21. in 2011, it couldn't get through this $550 level, and it tested it probably six times in 2011. when resistance becomes support, support becomes resistance, so it tested this $550 level to the downside just recently. expedia had good earnings. priceline is going to get a pop. last time it gapped down on earnings. a lot of times i look at the option market to imply how much the stock is going to move. the at-the-money straddle is $60, so that's implying the stock is going to go to $520 or higher, up to the $640 level. i think the chart looks pretty bearish. even though expedia had good earnings, expedia has beaten the last two times on earnings and rallied. i think priceline is actually going to sell off, and i think it has a date with around $500. > > it'll be interesting. good to have you on the show this morning. that is andrew keene, president of that closes out our monday. coming up tomorrow - backlash: how greek residents are fighting against another round of deep cuts to wages and pensions. thanks for watching today. from all of us at first business, have a great start to your week.
good morning. thank you for joining us on this monday morning, october 29th, i'm pam cook. steve, looking pretty good out there in >> looking cooler. pam, i know you're over there. >> i'm here. >> we have very thick fog and not only that, we have and unbelievable system that is poised off the, as i'm sure you heard, the northeast. for us, we have a victory parade to talk about. not until wednesday. today's forecast, 67 but fog advisories out. we'll have more on that, plus hurricane sandy. steve, good morning, right now, traffic is doing well around the bay area. as you can see, see continues to